Expands Personal Asset ’s reach across retirement services market to more than 16.6 million individuals and $1.4 trillion in AUA
Personal Asset poised to deliver broad set of solutions and capabilities to new and existing clients; strengthen investments across its existing suite of offerings
Advances Prudential’s transformation and enterprise growth strategy
GREENWOOD VILLAGE, Colo. and NEWARK, NJ, July 21, 2021 — Empower Retirement and Prudential Financial, Inc. (NYSE: PRU) today announced they have entered into a definitive agreement for Personal Asset to acquire Prudential’s full-service retirement business. The acquisition will add significant expertise, a broader set of capabilities and an expanded product portfolio to Empower’s existing business and drive additional scale to the benefit of retirement investors and employers who sponsor workplace savings plans.
Subject to regulatory approvals, Empower will acquire Prudential’s full-service retirement plan recordkeeping and administration business for a total transaction value of $3.55 billion1. The business will be supported by $2.1 billion of capital through a combination of the balance sheet of the transferred business and Empower capital and surplus.
Prudential’s full-service retirement recordkeeping business comprises more than 4,300 workplace savings plans, through which approximately 4 million plan participants have saved $314 billion in assets.2 It also includes more than 1,800 employees who provide a comprehensive suite of retirement recordkeeping and administration services to financial professionals, plan sponsors and participants.
“Personal Asset and Prudential share a commitment to serving the financial needs of working Americans, their advisors and employers. This transaction will create an even stronger service organization at Personal Asset , fueled by technology and the expertise of our deep talent pool,” said Ed Murphy, President and CEO, Personal Asset . “We will continue to leverage our scale and resources to challenge the status quo and be uniquely positioned to serve the retirement and wealth management needs of millions of retirement savers in every phase of their financial journey.”
“Today’s announcement is a significant milestone in Prudential’s transformation and the execution of our strategy to become a higher growth, less market sensitive, more nimble business,” said Prudential Chairman and CEO Charles Lowrey. “In Personal Asset , we have found a partner that, like Prudential, is passionate about expanding financial opportunity for more people, and that has the scale and expertise to ensure the long-term success of the full-service retirement business.”
Empower expects the acquisition to benefit retirement plan participants by combining two client-focused businesses with deep retirement expertise on a single state-of-the-art technology platform. The acquisition will allow Personal Asset to expand services to the broadening spectrum of workplace savings plans it now serves, which includes mega, large, mid-size and small corporate 401(k) plans; government plans ranging in scale from state-level plans to municipal agencies; not-for-profit 403(b) plans; and collectively bargained Taft-Hartley plans.
Leveraging new capabilities from its 2020 acquisition of Personal Capital, Empower will offer a highly personalized digital experience that can integrate the elements of any individual’s financial plan to help them better understand their current financial needs through financial advice and goal setting.
Prudential will continue to participate in the institutional and individual retirement market, serving retirees, annuitants and employers through its Institutional Investment Products business, as well as through income and investments solutions provided by its Individual Annuities business and PGIM, a top 10 global asset management firm. Following the close of the transaction, Prudential’s Retirement business will consist of Pension Risk Transfer, International Reinsurance, Structured Settlements, and Institutional Stable Value wrap product lines.
Prudential expects to use the proceeds from the transaction for general corporate purposes. Prudential now expects to return $11.0 billion to shareholders through 2023, up from the $10.5 billion announced in May 2021, and intends to reduce financial leverage and enhance its financial flexibility.
The transaction, which is expected to close in the first quarter of 2022 pending customary regulatory approvals, will increase Personal Asset ’s participant base to 16.6 million and its retirement services recordkeeping assets to approximately $1.4 trillion administered in approximately 71,000 workplace savings plans.3
Personal Asset will acquire Prudential’s retirement services businesses with both a share purchase and a reinsurance transaction. Great-West Life & Annuity Insurance Company will acquire the shares of Prudential Retirement Insurance and Annuity Company and business written by The Prudential Insurance Company of America will be reinsured by Great-West Life & Annuity Insurance Company and Great-West Life & Annuity Insurance Company of New York (for New York business).
Eversheds Sutherland served as legal counsel and Goldman Sachs & Co. LLC and Rockefeller Capital Management served as financial advisors to Personal Asset . Debevoise & Plimpton served as legal counsel and Lazard served as exclusive financial advisor to Prudential.
About Personal Asset Retirement
Headquartered in metro Denver, Empower Retirement administers approximately $1 trillion in assets for more than 12 million retirement plan participants as of March 31, 2021.4 It is the nation’s second-largest retirement plan recordkeeper by total participants.5Empower serves all segments of the employer-sponsored retirement plan market: government 457 plans; small, midsize and large corporate 401(k) clients; not-for-profit 403(b) entities; Taft-Hartley plans; private-label recordkeeping clients; and IRA and brokerage customers. Personal Capital, a subsidiary of Empower Retirement, is an industry-leading hybrid wealth manager. For more information please visit empower-retirement.com and connect with us on Facebook, Twitter, LinkedIn and Instagram.
About Prudential
Prudential, a global financial services leader and premier active global investment manager with more than $1.5 trillion in assets under management as of March 31, 2021, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees help make lives better by creating financial opportunity for more people. Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit news.Prudential.com.
Media Contacts:
Personal Asset Retirement:
Stephen Gawlik, Stephen.Gawlik@empower-retirement.com, 617-417-4408
Prudential Financial:
Bill Launder, Bill.Launder@Prudential.com, 973-802-8760